Respuesta :
Comparing financial ratios of companies within the same industry may be misleading because some companies may have investments in other industries that could distort the comparison.
Why do small business owners compare their ratios to other firms in the same industry?
Ratios can highlight trends in specific industries and establish benchmarks for measuring the performance of all industry participants. Small businesses can compare their success to the performance of the industry as a whole by using industry benchmarks to develop organizational strategies.
Why is it complicated to compare a given ratio of two companies operating in different sectors industries?
It could be necessary to compare various divisions to various industry averages. Very large corporations may be made up of various divisions that produce various goods or provide various services. To make ratio analysis meaningful, distinct industry averages must be employed for each respective division.
Learn more about Ratio analysis: https://brainly.com/question/20715261
#SPJ4
